Relief for households as Yorkshire Water lowers bill hike and pledges to link rises to inflation from 2016 to 2020

A water company has given its customers much-needed relief by announcing that its bill rises will be lower than expected in the next financial year, and pledged to control prices until 2020.

Unlike their counterparts in the gas and electricity industry, Yorkshire Water has said it will increase its bills in line with inflation in 2013/14, rather than implementing the higher increase it had agreed with regulator Ofwat in 2009.

This means the average household water bill in Yorkshire will be £373, which is £6 lower than planned.

Welcome announcement: Yorkshire Water has announced it will be linking water bill rises to inflation between 2016 and 2020.

It is also due to disclose on Monday a plan to keep bills linked to inflation from 2016 to 2020, which will be paid for by efficiencies and cutting its returns to investors.

It will come as a boost for customers who are seeing rises in energy prices from the 'Big Six' that far outstrip inflation, which in October stood at 2.2 per cent.

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Chief executive Richard Flint said: 'Yorkshire Water bills are already lower than the national average but we are committed to doing even more to help our customers.

'We understand the pressures on households and that's why we're planning to keep bills in line with inflation for the next six years.

'This is a challenging plan that we are confident we'll deliver through prudent financial management, sharing company efficiencies with customers and by reducing our returns to investors.'

Andrea Cook, regional chair of the Consumer Council for Water, said: 'This customer-focused decision by Yorkshire Water to limit price increases for next year, at a time when consumers face economic pressures from all directions, is welcomed.

'Customers on low and fixed incomes struggle to keep up even with small bill increases and this will be of particular benefit to them. The decision reinforces that the benefits of improved performance can be shared by shareholders and customers alike.'

Earlier this month Maria Eagle, the shadow environment secretary, said in an interview with the Yorkshire Post newspaper that it should be compulsory for firms to offer lower bills for poorer households.

She said: 'Water firms are spending too much effort on engineering their finances to avoid paying tax on their profits, and not enough time helping customers struggling to pay bills.'